Saturday, November 15, 2008

A basket of Brinjal or an ounce of Gold

My parents during their child hood have used 'ana' (One sixteenth of a rupee), In my child hood I have used 'five paise', 'ten paise', 'twenty paise' coins, todays children may perhaps not even have seen them.

A few decades back one whole day living of a joint family used to get accomodated in a rupee or two. There was a period when people used to admire at "Latchathipathy"(owner of one lakh) as some kind of astonishing achievement.

During my recent trip to India, a kg tomato was about 50 rupees, land prices are just a few folds costlier than last year. On an average , be it a basket of Brinjal or an ounce of Gold, prices and living cost have been ever increasing. "Inflation" an uncertainty that can affect drastically any economy is affecting every one, especially the developing and poor countries. The value of a currency ("purchasing ability per unit of currency") is decreasing every year.
I am not a technocrat of economics, and there can be numerous factors that influence inflation rate, but in my opinion the very basic issue that acts as a root of the whole problem is the present "Interest based financial system" we are following all over the world.

A man lends money, does no effort on his behalf but expects a higher return ...
" money --> NO effort --> more money return --> decrease in the value of money "

icher gets richer , and finally all the burden falls on the back of poor lying at the very end of the financial chain. Unless the financial system is changed from interest based to investment based (invest and share both the profit as well as the loss), the value of money will keep decreasing and the burden on the poor will keep increasing for ever.